Successor Trustee duties? Help!

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
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Investor8852
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Joined: Fri Jul 20, 2018 1:21 pm

Successor Trustee duties? Help!

Post by Investor8852 » Fri Jul 20, 2018 1:29 pm

(I'm new here and in the US. I was referred to the board from another personal finance forum. Thank you for reading all the way through!)

My FIL (father-in-law) passed away recently and had very few assets, but what he did have was in a revocable living trust. Basically, he had a checking account with ~$3000, a condo which is likely underwater and unsalable due to some land ownership issues in his resident state, and an old car. The condo is actually jointly owned between his RLT and his ex-wife's RLT (my MIL, who is still living). MIL (mother-in-law) is the current successor trustee, but is in poor health, so DH (dear husband) and I have been doing everything regarding settling his business. DH (dear husband) is considering having MIL (mother-in-law) resign as successor trustee, at which point DH (dear husband) would take on the role, but is not sure he wants to take on the liability.

My questions:

1) FIL's bank (where he has the checking account), in addition to the death certificate, is asking for an "Acceptance of Successor Trustee" letter, which they say is a legal document that needs to be signed and notarized by the successor trustee. Does anyone know if this is something we can obtain on our own (e.g. through Legal Zoom or other online site) or do we need to find a lawyer to write the doc? (I found this form on LegalDesq and am thinking this is what we need: http://www.legaldesq.com/document/affid ... r-trustee/)

2) The estate attorney who wrote the trust is saying that FIL's half of the condo must be transferred to the trust beneficiaries and cannot continue to be held in the trust. Is this true? I ask because the plan is to give the condo back to the bank (deed-in-lieu of forclosure) as no one lives there (MIL is destitute and lives in low-income senior housing) and keeping it as a rental is not an option. DH & BIL, as beneficiaries of FIL's trust, don't want to take ownership of this property. We're also unsure of the tax implications of inheriting such a property. Plus, if ownership of FIL's half of the condo were transferred to DH & BIL, they'd need to then transfer it to his mom before she gives the condo to the bank (because we don't want that on DH's record).

3) The same attorney quoted us $2500 for "Demise Certification", "Certificate of Beneficiary", "Disclaimer Elections", and "Deed to Beneficiary". The last I assume is for his help in transferring the condo to the trust beneficiaries, but what are the others and do we need those? "Demise Certification" sounds just like a death certificate. We already have multiple certified copies of the death certificate. And I have no clue what the other 2 are.

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Sandtrap
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Location: Hawaii😀 Northern AZ.😳 Retired.

Re: Successor Trustee duties? Help!

Post by Sandtrap » Sat Jul 21, 2018 12:53 am

Seek personal legal counsel for advice and direction.
j

Jablean
Posts: 184
Joined: Sat Jun 02, 2018 2:38 pm

Re: Successor Trustee duties? Help!

Post by Jablean » Sat Jul 21, 2018 1:40 am

Find an attorney who is not in the same firm as the one who created the trusts. Were your in-laws wealthy at the time? rhetorical question

I would think that on #2 the beneficiarys could simply decline to accept anything from the trust, automatically putting everything in your MIL's hands.

Carefreeap
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Joined: Tue Jan 13, 2015 7:36 pm
Location: SF Bay Area

Re: Successor Trustee duties? Help!

Post by Carefreeap » Sat Jul 21, 2018 11:52 am

Sandtrap wrote:
Sat Jul 21, 2018 12:53 am
Seek personal legal counsel for advice and direction.
j
+1

FWIW I was a beneficiary of an upside estate including a condo that was underwater by about $300k in 2008. There was another $100k of IRS and credit card debt. I did my homework and was able to turn things around. I sold that condo last year for a $300k profit. 8-)

I'm not suggesting that you or your DH do what I did. But do your homework. I found Nolo's Probate Book on how to settle an estate in CA helpful. I would recommend the same for whatever state your FIL lived in.

A potential heir can "decline" an inheritance. One question I have is whether there might be an issue for your MIL if her living arrangement is somehow income or asset based. If that's the case you might want to talk with an elder law atty to ensure that if she chooses to decline her inheritance that it's properly documented to avoid disqualifying for the program (or Medicaid if that's also in the mix).

Good luck. I know this situation is difficult and emotionally draining.

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